Datadog Q3 earnings on deck: What to expect

What happened

Datadog will report third-quarter earnings before the market opens on Wednesday, November 4th. Wall Street expects earnings per share of $0.64, up 16.4% from a year earlier, and revenue of $1.15B, up nearly 30% from a year earlier.

Confirmed

Global impact / market context

Datadog sells a security platform for cloud applications, so its results show whether businesses keep spending on cloud tools. A revenue beat would signal that customers are combining spending onto Datadog and that AI budgets are moving from trial projects into core budgets.

Analyst inference

Analysts are bullish and rate the stock a Strong Buy. Scotiabank rates it Sector Outperform with a $285 price target, implying nearly 32% upside from Monday's close of $216.10. Cloud providers Amazon, Microsoft, and Google linked AI adoption to cloud use.

Analyst inference

What to watch

1. Watch whether reported revenue lands above the company's own guidance range of $1.135B to $1.145B, which would confirm the expected beat. Confirmed
2. Watch earnings per share against the guided range of $0.63 to $0.65, since a result at the low end would weaken the bullish case built on customer consolidation. Analyst inference
3. Watch whether management says AI spending is moving from pilots into core budgets, because that claim supports the view that cloud usage keeps growing. Proposed

Evidence

• seekingalpha.com